Judge: Elaine Lu, Case: 20STCV14383, Date: 2022-09-19 Tentative Ruling

Case Number: 20STCV14383    Hearing Date: September 19, 2022    Dept: 26

Superior Court of California

County of Los Angeles

Department 26

Background

            On April 4, 2020, Plaintiff Selena Gomez (“Plaintiff”) filed the instant right of publicity action against Defendants Forgame US Corporation; Forgame Holdings Limited; Mutantbox Interactive Limited; Guangzhou Feidong Software Technology Co., LTD.; Guangzhou Feiyin Information Technology Co., LTD.; Guangzhou Jieyou Software Co., LTD; Dongfeng Wang; Na Liang; and Roy Liu.  The complaint asserts two causes of action for (1) Violation of and Conspiracy to Violate Statutory Right of Publicity and (2) Violation of and Conspiracy to Violate Common Law Right of Publicity.

            On February 28, 2022, the Court denied Plaintiff’s motion for alternative service of process on Defendants Guangzhou Feidong Software Technology Co., LTD.; Guangzhou Feiyin Information Technology Co., LTD.; and Guangzhou Jieyou Software Co., LTD (“PRC Entity Defendants”) without prejudice.  The Court found Plaintiff failed to demonstrate sufficient reasonable diligence and discovery of the current addresses of PRC Entity Defendants for service of process.  The Court specifically noted that Plaintiff’s evidence gave no indication of (1) what efforts, if any, Plaintiff had undertaken to contact and locate any of the defendants with the email addresses, phone number, and fax number Plaintiff had for the parties; (2) efforts to obtain current addresses from the PRC Entity Defendants from their parent company Forgame; and (3) efforts to obtain the PRC Entity Defendants’ current locations from their officers/representatives Dongfeng Wang and Na Liang.  The Court noted the motion was prematurely filed.

            On July 25, 2022, Plaintiff filed the instant motion for alternative service of PRC Entity Defendants and Na Liang (“Liang”).  Defendant Dongfeng Wang (“Wang”) filed opposition papers on August 9, 2022.  Plaintiff filed reply papers on August 15, 2022.

            On August 30, 2022, the Court noted that it was inclined to grant Plaintiff’s requests for alternative service through publication in the Los Angeles Daily Journal and China Business Herald and/or International Business Daily and through LinkedIn InMail. The Court further noted that it was inclined to deny Plaintiff’s request for alternative service through service on co-defendant Forgame and its counsel.  However, as to Plaintiff’s request for alternative service through Defendant Wang and Counsel, the Court continued the instant motion to September 19, 2022.

            On September 9, 2022, Defendant Wang submitted a supplemental declaration in support of the opposition.  On September 14, 2022, Plaintiff filed a supplemental reply.

Request for Judicial Notice

With the reply, Plaintiff requests that the Court take judicial notice of:

1.      Form S-1 Registration Statement for Prime Number Acquisition I Corp. filed as a confidential draft submission to the SEC on June 4, 2021;

2.       Form S-1 Registration Statement for Prime Number Acquisition I Corp. filed with the SEC on February 1, 2022;

3.      Amendment No. 2 to Form S-1 Registration Statement for Prime Number Acquisition I Corp. filed with the SEC on May 3, 2022;

4.      Prospectus for Prime Number Acquisition I Corp. dated May 16, 2022 and filed with the SEC; and

5.      Form 8K Current Report for Prime Number Acquisition I Corp. dated July 13, 2022 and filed with the SEC

In supplemental reply, Plaintiff requests that the Court take judicial notice of:

1.      Letter dated June 29, 2021, from the SEC’s Division of Corporation Finance, Office of Energy & Transportation, addressed to Dongfeng Wang regarding Prime Number Acquisition I Corp.’s draft Form S-1 Registration Statement

2.      Letter dated February 1, 2022, signed from Dongfeng Wang as Prime Number Acquisition I Corp.’s CEO to Wei Lu of the SEC’s Division of Corporation Finance, Office of Energy & Transportation, regarding Prime Number Acquisition I Corp.’s amended draft Form S1 Registration Statement

3.      Letter dated February 17, 2022, from the SEC’s Division of Corporation Finance, Office of Energy & Transportation, addressed to Dongfeng Wang regarding Prime Number Acquisition I Corp.’s amended Form S-1 Registration Statement

4.      Letter dated March 4, 2022, signed from Dongfeng Wang as Prime Number Acquisition I Corp.’s CEO to Liz Packebusch of the SEC’s Division of Corporation Finance, Office of Energy & Transportation regarding Prime Number Acquisition I Corp.’s amended draft Form S-1 Registration Statement

5.      Letter dated May 9, 2022, signed from Dongfeng Wang as Prime Number Acquisition I Corp.’s CEO to Liz Packebusch of the SEC’s Division of Corporation Finance, Office of Energy & Transportation, responding to an oral comment relating to Prime Number Acquisition I Corp. from an SEC staff

6.      Letter dated May 10, 2022, signed from Dongfeng Wang as Prime Number Acquisition I Corp.’s CEO to Liz Packebusch of the SEC’s Division of Corporation Finance, Office of Energy & Transportation, regarding Prime Number Acquisition I Corp. Form S-1 Registration Statement

As the court may take judicial notice of court and state records, (See Evid. Code, § 452(c),(d)), the unopposed request for judicial notice is granted. However, the Court will not take judicial notice of the truth of assertions within. (See Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366, 1375.)

Discussion

Motion for Alternative Service

As to Plaintiff’s motion for an order authorizing service on PRC Entity Defendants and Liang by publication in the Los Angeles Daily Journal and China Business Herald and/or International Business Daily is GRANTED for the reasons stated in the August 30, 2022 order.  (Order 8/30/22 at pp.3:5-9:25.)  Plaintiff’s motion for a request for alternative service on Liang through LinkedIn is GRANTED on the condition that Plaintiff also serve by publication for the reasons stated in the August 30, 2022 order.  (Order 8/30/22 at pp.10:1-12:6.)  Plaintiffs’ motion for alternative service through Co-Defendant Forgame is DENIED for the reasons discussed in the Court’s August 30, 2022 order.  (Order 8/30/22 at pp.12:7-17:9.)

Service Through Co-Defendant Wang

Plaintiff also requests a court order authorizing alternative service on PRC Entity Defendants through service on co-defendants Wang and his counsel.  Plaintiff argues that the nature of the relationship Wang shares with PRC Entity Defendants means that service through Wang is reasonably calculated to give actual notice of service to PRC Entity Defendants.

Plaintiff cites to Cosper v. Smith & Wesson (1959) 53 Cal.2d 77, Yamaha Motor Co., Ltd. v. Superior Court (2009) 174 Cal.App.4th 264, and In re LDK Solar Sec. Litig. (N.D. Cal. June 12, 2008) 2008 WL 2415186 in support of this request.

In Cosper, the California Supreme Court primarily dealt with whether there were sufficient minimum contacts such that the defendant foreign manufacturer, Smith & Wesson, could be subject to jurisdiction in California.  However, the California Supreme Court also discussed whether the arrangement of defendant foreign manufacturer, Smith & Wesson, with its manufacturer’s representative, Lookabaugh, was sufficient for Lookabaugh to be deemed a general manager in California for the purposes of effecting service on Smith & Wesson under Corporations Code section 6500.  In finding that the arrangement was sufficient, the California Supreme Court found that “it reasonably appear[ed] that Lookabaugh, as a manufacturer’s representative actively engaged in promoting the sales of Smith & Wesson and earning commissions through such sales, would have ample regular contact with Smith & Wesson and would be of ‘sufficient character and rank to make it reasonably certain’ that Smith & Wesson would be apprised of the service of process.  (Cosper, supra, 53 Cal.2d at p.83.)

In Yamaha Motor Co., Ltd., it was undisputed that Yamaha-America was Yamaha-Japan’s wholly owned domestic subsidiary in the United States and that Yamaha-America’s principal business was to act as the exclusive importer and distributor of Yamaha vehicles manufactured by Yamaha-Japan.  (Yamaha Motor Co., Ltd., supra, 174 Cal.App.4th at 268.)  The Court of Appeal discussed Cosper, noting the bulk of the Cosper decision was devoted to the due process minimum contacts issue.  (Id. at p.273.)  Notwithstanding that, the Court of Appeal also found that Cosper “clearly held that service on the sales representative was valid service on the corporation itself, reasoning that the representative had ‘ample regular contact’ so that it was ‘reasonably certain’ that the representative would apprise the manufacturer of the service.”  (Ibid. (quoting Cosper, supra, 53 Cal.2d at p.83).)  Based on this, the Court of Appeal found that Yamaha-America was a general manager of defendant Yamaha-Japan because Yamaha-America had an exclusive arrangement to sell the manufacturer’s products; provided warranty service and English owner manuals; did testing and marketing; and received complaints about the manufacturer’s products such that “[p]robable contact between the domestic representative and the foreign corporation leading to actual notification [was] far more present [there] than in Cosper.”  (Id. at p.274.)  The Court of Appeal found that “[i]f it was reasonably certain that a relatively casual sporting goods representative would apprise the ‘foreign’ manufacturer of service in Cosper, it [was] doubly reasonably certain Yamaha-America [would] apprise Yamaha-Japan of any service in California.”  (Id.)

The federal court in In re LDK Solar Sec. Litig. (N.D. Cal. June 12, 2008) 2008 WL 2415186 dealt with the issue of whether defendants, both individuals and the corporate defendant’s subsidiary, located in China could be served by service through the domestic corporate defendant at the corporate defendant’s California office.  The federal court noted that to comport with constitutional notions of due process, “the method of service crafted by the district court must be ‘reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.’”  (In re LDK Solar Sec. Litig. (N.D. Cal. June 12, 2008) 2008 WL 2415186, at *4 (quoting Rio Properties, Inc. v. Rio Intern. Interlink (9th Cir. 2002) 284 F.3d 1007, 1016).)  The federal court found that the proposed form of service on the individual and subsidiary defendants in China through service on the domestic corporation’s California office was constitutionally acceptable as the domestic corporation traded on the New York Stock Exchange, the corporate defendant’s subsidiary was located in California, and the remaining defendants were all sophisticated officers, directors, or the Chinese subsidiary of the corporate defendant.  (Ibid.)

Plaintiff argues that, through Wang’s trust, Wang shares an interest in the PRC Entity Defendants as a major shareholder of Forgame and that Wang also owns a material stake in Guangzhou Feiyin Information Technology Co., LTD. and Guangzhou Jieyou Software Co., LTD. as one of five shareholders of the entities.  Plaintiff contends these relationships mean that service of process through Wang and his counsel of record is reasonably calculated to give actual notice of service to PRC Entity Defendants.  Moreover, the official corporate registries states that as of July 18, 2022 Wang is still the legal representative of both Guangzhou Feiyin Information Technology Co., LTD. and Guangzhou Jieyou Software Co., LTD.  (Weingarten Decl. ¶¶ 40-41, Exhs. 33-34.) 

In opposition, Wang claims that he no longer has any control of or relationship with PRC Entity Defendants beyond that of a shareholder and that he has moved from China to the United States and has no contact with PRC Entity Defendants.  Wang thus contends serving him would not be reasonably calculated to apprise PRC Entity Defendants of the pendency of this action and afford them an opportunity to present their objections.

Wang has submitted a declaration declaring that he has resigned from his position of executive director of Forgame, effective September 30, 2019; that he has resigned from his remaining positions with Forgame in 2021, including his position as independent non-executive director; that he is not currently an officer, director, employee, or independent contractor with Forgame or any PRC Entity Defendants; that he does not serve any of the entities in any other representative capacity; that he currently owns 0.00% of Guangzhou Feidong Software Technology Co., LTD., 23.75% of Guangzhou Feiyin Information Technology Co., LTD., and 20.94% of Guangzhou Jieyou Software Co., LTD., but is solely a shareholder with no role or control over operations; and that he has not had any contact with any of the PRC Entity Defendants for three years.  (Wang Decl. ¶¶ 2-9.)  Based on Wang’s declaration, it would appear that Wang is currently not in control of or in contact with any of the PRC Entity Defendants, and service through Wang and his counsel would not be reasonably calculated to give actual notice to PRC Entity Defendants.  That Wang is still a shareholder of Guangzhou Feiyin Information Technology Co., LTD. and Guangzhou Jieyou Software Co., LTD. is insufficient to show he has ample or probable contact with these entities.

However, Plaintiff has submitted evidence in reply that shows that Wang has submitted statements to the SEC regarding a company he is in charge of that indicate he currently holds a fiduciary position as a “director” of Guangzhou Feiyin Information Technology Co., LTD. and Guangzhou Jieyou Software Co., LTD.  (Request for Judicial Notice (“RJN”), Exh. 1, June 4, 2021 Form S-1 Registration Statement for Prime Number Acquisition I Corp., p. 129; id., Exh. 2, February 1, 2022 Form S-1 Registration Statement for Prime Number Acquisition I Corp., p. 125; id., Exh. 3, May 3, 2022 Amendment No. 2 to Form S-1 Registration Statement for Prime Number Acquisition I Corp., p. 128; id., Exh. 4, May 16, 2022 Prospectus for Prime Number Acquisition I Corp., p. 125.)  These statements were made as recently as May 16, 2022. 

In Wang’s supplemental declaration, Wang states that the documents submitted by Plaintiff in her reply brief were on behalf of Prime Number Acquisition I Corp. and have nothing to do with Defendants Guangzhou Feiyin Information Technology Co., LTD. and Guangzhou Jieyou Software Co., LTD.  (Supp. Wang Decl. ¶ 5.)  Wang states that he was not involved in drafting these documents as they were in English which Wang does not read fluently.  (Supp. Wang Decl. ¶¶ 6-7.)  Wang states that he has been trying diligently to correct the errors in the SEC filings listing Wang as a director of Guangzhou Feiyin Information Technology Co., LTD. and Guangzhou Jieyou Software Co., LTD.  (Supp. Wang Decl. ¶¶ 8-9, 11.)  Wang then restates that he is solely a shareholder and has no role nor control of either entity.  (Supp. Wang Decl. ¶ 10.)

In supplemental reply, Plaintiff contends that the SEC’s letters to Wang indicate that he had a hand in drafting the SEC filings for Prime Number Acquisition I Corp.  (Supp. RJN Exhs. 1-6.)

The Court finds that there is sufficient evidence showing that service on Defendant Wang would apprise Defendants Guangzhou Feiyin Information Technology Co., LTD. and Guangzhou Jieyou Software Co., LTD. of the instant action.  First, the Court finds Wang lacks credibility insofar as he attempts to distance himself from and discredit his own declaration. Regardless of whether Wang drafted the SEC filings himself, it is fair to impose on him an expectation that he would undertake reasonable measures to verify the accuracy of the filings prior to signing them.  “‘Reasonable diligence requires the reading of a contract before signing it. A party cannot use his own lack of diligence to avoid an arbitration agreement.’”  (24 Hour Fitness, Inc. v. Superior Court (1998) 66 Cal.App.4th 1199, 1215 [internal citation omitted].)  “It is well established, in the absence of fraud, overreaching or excusable neglect, that one who signs an instrument may not avoid the impact of its terms on the ground that he failed to read the instrument before signing it.”  (Randas v. YMCA of Metropolitan Los Angeles (1993) 17 Cal. App. 4th 158, 163.)  Generally, “one who accepts or signs an instrument, which on its face is a contract, is deemed to assent to all its terms, and cannot escape liability on the ground that he has not read it. If he cannot read, he should have it read or explained to him.”  (Id.) 

Even after Wang’s move to the United States in September 2019 (Wang Decl. ¶¶ 7-8),  Wang still owns over 20% of the shares of both Guangzhou Feiyin Information Technology Co., LTD. and Guangzhou Jieyou Software Co., LTD.  (Wang Decl. ¶ 7.)  Neither Guangzhou Feiyin Information Technology Co., LTD. nor Guangzhou Jieyou Software Co., LTD has conducted business since 2018.  (Wang Decl. ¶ 10.)  Nonetheless, the corporate records for Guangzhou Feiyin Information Technology Co., LTD. and Guangzhou Jieyou Software Co., LTD. both list Wang as their legal representative as of July 18, 2022.  (Weingarten Decl. ¶¶ 40-41, Exhs. 33-34.)  This evidence indicates that Wang was in contact with Guangzhou Feiyin Information Technology Co., LTD. and Guangzhou Jieyou Software Co., LTD. in 2019 after they stopped conducting business in 2018.  As Wang has – self admittedly – been in contact with Guangzhou Feiyin Information Technology Co., LTD. and Guangzhou Jieyou Software Co., LTD even after they stopped doing business, this evidence clearly indicates that Wang could reasonably give notice to the no longer running business.  Moreover, Wang is listed as the legal representative – which Wang does not address.  In sum, this evidence indicates that Guangzhou Feiyin Information Technology Co., LTD. and Guangzhou Jieyou Software Co., LTD are no longer in business and that Wang was the last legal representative of these companies.  Accordingly, as Guangzhou Feiyin Information Technology Co., LTD. and Guangzhou Jieyou Software Co., LTD are no longer in business, Wang was the last and remains still the listed legal representative, service on Wang is reasonably calculated to give notice to Guangzhou Feiyin Information Technology Co., LTD. and Guangzhou Jieyou Software Co., LTD.

Accordingly, Plaintiff’s request for alternative service on Defendant Wang and/or his counsel is GRANTED as to Guangzhou Feiyin Information Technology Co., LTD. and Guangzhou Jieyou Software Co., LTD.

Amount of Damages Not Identified in the Operative Complaint

            As discussed in the February 28, 2022 and August 30, 2022 Order, Plaintiff’s complaint fails to give notice of the amount of damages Plaintiff seeks to recover, which is problematic because the Court will not be able to enter default judgments as to any of the currently defaulted defendants or any of the PRC Entity Defendants or Liang if Plaintiff succeeds in serving the original complaint on PRC Entity Defendants and Liang.  It does not appear Plaintiff has made any attempts to amend the complaint to identify a dollar amount of damages.  Plaintiff is reminded that even if Plaintiff is permitted to serve PRC Entity Defendants and Liang through alternative service methods by way of the Court’s granting of this motion, Plaintiff would have to first file an amended complaint and serve the amended complaint, not the original complaint, on PRC Entity Defendants and Liang in the event Plaintiff proceeds with a default judgment.

Conclusion and ORDER

Based on the foregoing, Plaintiff Selena Gomez’s motion for alternative service is GRANTED IN PART.

            As discussed above and in the Court’s August 30, 2022 Order, the Court grants Plaintiff’s requests for alternative service through publication in the Los Angeles Daily Journal and China Business Herald and/or International Business Daily and through LinkedIn InMail. 

Plaintiff’s request for alternative service through service on Defendant Dongfeng Wang and his counsel is GRANTED as to Defendants Guangzhou Feiyin Information Technology Co., LTD. and Guangzhou Jieyou Software Co., LTD. 

Plaintiff’s motion is otherwise DENIED.

If Plaintiff will be seeking to amend the complaint to identify the amount of its damages in the prayer for relief and body of the complaint, Plaintiff must file and serve either a stipulation signed by all parties or a noticed motion seeking leave to amend within 10 days, noticed for hearing on a date reserved on the online Court Reservation System (CRS).

            Plaintiff to give notice and file proof of service of such.

DATED:  September 19, 2022                                               ___________________________

Elaine Lu

                                                                                          Judge of the Superior Court